In a formalising of the agreement, profits will be split 50-50 on all Monstermob sales from Dixons stores.

Dixons today bought 303,031 Monstermob shares - equivalent to 1.28% of the company - for a discounted-price of 165p. It has an option to buy a further 1.8m at the same price until February 2007. Shares in the group, which floated at 135p in November last year, today jumped 9 1/2p to 195p - good news for 3% shareholder, former Conservative Home Secretary Lord Baker.

While in office, he campaigned against pornography, but that did not stop him accepting the chairmanship of the company.

Pre-tax profits in the year to 31 December came in at £1.5m against £313,000 a year earlier on sales of £13.9m compared with £7.9m in the previous year.